An Example of Fraud in Financial Reporting Would Be

question 50

Multiple Choice

An example of fraud in financial reporting would be

• A)allowing orders to be cancelled.
• B)arriving at a P/E using the weighted average number of shares outstanding during the year.
• C)inflating revenues by recording income from contracts which will extend beyond one year.
• D)advising your auditors about a change in accounting procedures.

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Definitions:

Operating Information

The information that is needed on a day-to-day basis in order for a company to conduct business.

Day-To-Day Basis

Refers to the routine or daily activities and tasks that are performed regularly.

Cost Ratio Formula

A mathematical formula used to determine the costs associated with producing goods or services in relation to the revenue they generate.

Total Expenses

The sum of all expenditures incurred by an individual or organization, including operational, capital, and other miscellaneous costs.